Albanian Economy - Increasing Deficit to Stimulate Slowing Demand
The Albanian government is bound to face criticism by the World Bank and the IMF for promoting a platform that requires the public finances to bankroll major spending in order to resuscitate a sluggish economy operating far below its full capacity.
The idea behind the governments breach of its own self-imposed public debt ceiling is that it will serve as a stimuli to the encourage employment and insert an invaluable source of liquidity into the national money market.
These figures make stark reading in comparison to the initially forecasted growth of 4% downgraded to 3.1% for this year and public debt ratio of 62.65% increased to 63.8% this year.
The Albanian government who would have had much more wriggling room had the sale of the national oil company, Albpetrol, had gone ahead as planned - will have to finance its deficit by borrowing domestically in Euros and Lek.
The sale of Albpetrol seems to have little hope of proceeding as planned - with Vetro Energy yet to pay anything at all from its contracted $1.15 billion - agreed from the privatisation tender.